Amazon: Q2 Earnings Preview

| About:, Inc. (AMZN)

Amazon (NASDAQ:AMZN) is set to release Q2 earnings on Tuesday July 26th after the market closes on the heel's of eBay's (NASDAQ:EBAY) announcement last week which was solid (we cover it here at sister-site eBay Strategies).

Wall Street is looking for:

  • 33% y/y growth (slowing from 36%)
  • Domestic growth is expected to be 45%
  • International growth should be 24%
  • $9.29B in revenue for Q2
  • $375m in pro-forma operating income

William Blair Report Summary

Mark Miller, internet analyst at William Blair, issued a report recently (you can download the full report here) called "More Retailers Struggling to Navigate Amazon's Surging Current". In the report, Miller looks at some of the top brick-and-mortar (B+M) retailers and compares their selection and pricing to Amazon's.

His conclusions:

  • B+M retailer's websites are not price competitive with their own stores
  • Companies that face the largest threat from Amazon: HHGregg (NYSE:HGG), Bed Bath and Beyond (NASDAQ:BBBY), Best Buy (NYSE:BBY), Target (NYSE:TGT), Dicks and Kohls. (NYSE:KSS)
  • Of 2400 items half are available on Amazon and at 11% cheaper than competitors
  • Amazon's price advantage would persist even if it faced taxes
  • Amazon's 3P marketplace is a strategic foundation for this strength

Here are three really interesting tables from the report that show the depth of research and some pretty amazing findings.

Table 1 - Selection comparison (click to enlarge images):


The table above compares the selection of 100 items from competitive stores to Amazon's 1P selection, 3P, etc.

Table 2 - This table compares prices of 100 items to Amazon's 1P and 3P prices:


Finally, Table 3 shows the % of items offered at a lower price at Amazon vs. stores:



While Amazon has come a long way, with 50% SKU coverage they still have a lot of work to do, and room to grow, in the dimension of selection. We'll provide detailed analysis of their Q2 results later this week.

Disclosure: I am long Google and Amazon. eBay is an investor in ChannelAdvisor where I am CEO.